It's a damn shame that Amalur, a solid B+ title with decent B- sales, is being counted as a failure because of the company's reckless, premature overinvestment in a different game. It's the MMO that wrecked 38, not Amalur.

The makers of The Witcher, by contrast, have already husbanded their first game's moderate initial success into a full-budget sequel. I'm confident that, for them, 1.7 million represents a tidy profit. And this is the sort of game that continues to sell as word spreads.

Originally Posted by RedSocialKnight
I'm confident that, for them, 1.7 million represents a tidy profit.

Personally, I'm not so sure - depends on what they spent on marketing.

The US marketing costs alone for AAA titles are usually in the range of tens of millions of dollars. Although they launched on PC only, there was also a costly Xbox campaign the following year. When you factor in the production budget, replication costs, wholesaler and retailer margins, royalties to Sapkowski and Microsoft, etc., as well as the international marketing, there is not likely to be much left on the table.

My understanding is that CD Projekt's primary source of revenue is from distribution of third party games and movies, so perhaps Witcher 2 helped to pave the way for future projects even if it was not extremely profitable.

Originally Posted by RedSocialKnight
It's a damn shame that Amalur, a solid B+ title with decent B- sales, is being counted as a failure because of the company's reckless, premature overinvestment in a different game. It's the MMO that wrecked 38, not Amalur.

The makers of The Witcher, by contrast, have already husbanded their first game's moderate initial success into a full-budget sequel. I'm confident that, for them, 1.7 million represents a tidy profit. And this is the sort of game that continues to sell as word spreads.

Actually, the MMO had been in development for a few years before they acquired Big Huge Games and their title "Ascendant". Technically, the cost overrun of that game and rebranding/redesigning it into the Amalur universe likely ate into the cost of creating the MMO.

But it seems that for a console game, the developer nets about 15% of the total purchase price when the game is sold a at a retail store ($9.00 in the case of a $60.00 Video game) although this can vary depending on the developer, some developers can apparently negotiate a bigger share of the pie.

One interesting thing is that for console games, 30% of the sales price goes to the console manufacturer (e.g., Microsoft for xbox), and this is non-negotiable. So the return to all parties is larger in the case of a PC game — so the developer should get 15% of that 30% (4.5%) in the case of a PC game; meaning that the developer should get about 19.5% of PC sales price on average.

Basically, if Witcher 2 development costs are 25% or less of the costs of the large developers development costs (10 million development for Witcher vs 40-50 million for ME3 and Skyrim), then CDPR should see a profit at 25% of the sales needed by the big developers to turn a profit.

The above actually makes sense when comparing to the movie industry where the indie film makers can make a movie at a much lower cost than costs for the big studios.

Digital distribution reduces but doesn't eliminate the retailer's take of the pie, btw, since digital distribution costs are substantially lower.

"Manufacturers often impose a strict approval process and take a percentage of the game's net profit in addition to yearly developer fees. As of this writing[when?], to develop for Nintendo Wii, Xbox 360, or PlayStation 3 requires an SDK license fee of between US$2,000 and $10,000, in addition to yearly developer fees and profit cuts, although development for Xbox Live Indie Games only requires a $99/year Creators Club membership and Microsoft takes 30% of sales."

Note that we have differing figures of 20% (chart) and 30% (Indie development article). I don't know which is correct. But it is clear that the console manufacturers do get a big cut off the top.

Originally Posted by Gorath
TW2 is a special case because CDP is (a) both developer and publisher / co-publisher, (b) self-funding and (c) has their own DDL service.
It's clear they receive higher royalties than the average dev.

In the US, however, which is where most of the Witcher 2 sales came from, the game was not self-published but instead published by Namco Bandai (and Warner Bros for the Xbox version, if I understand correctly). Also, most digital sales were derived from Steam, rather than GOG.

Originally Posted by CountChocula
In the US, however, which is where most of the Witcher 2 sales came from, the game was not self-published but instead published by Namco Bandai (and Warner Bros for the Xbox version, if I understand correctly). Also, most digital sales were derived from Steam, rather than GOG.

The publishing deals are retail only. CDP does all digital alone. CDP self-publishes retail in a couple of Eastern European countries, including their home country. That's more than 99% of all developers can claim.
CDP had a relatively strong negotiation position for TW2. TW was a hit, the brand is well known, the business model proven, the publisher doesn't have to sholder development costs, CDP doesnt need the money to survive, CDP is perfectly connected - they know everybody because they've published their games in Eastern Europe for a decade.
So unless Atari comitted to a gigantic marketing budget and huge guarantees they were only the junior partner in this deal.
News on the French XBox verdict aren't clear. CDP had to offer Namco either a distribution deal or a publishing deal, depending on the source.

Originally Posted by RPGFool
Note that we have differing figures of 20% (chart) and 30% (Indie development article). I don't know which is correct. But it is clear that the console manufacturers do get a big cut off the top.

As I understand it, and I might be wrong, the 30% indie cut is off sold units. The ca. 20%, nowadays probably slightly less because we're near the end of the console cycle, have to be paid up-front. Every DVD has to be ordered through certified replicators.
Now do the math how much money Bethesda invests when they ship 5M units at release.

Originally Posted by Gorath
As I understand it, and I might be wrong, the 30% indie cut is off sold units. The ca. 20%, nowadays probably slightly less because we're near the end of the console cycle, have to be paid up-front. Every DVD has to be ordered through certified replicators.
Now do the math how much money Bethesda invests when they ship 5M units at release.

Not to mention the upfront costs of x years development and marketing.. which is why publishers exist - which in The Witcher's case was a publisher who'd stockpiled money from their own publishing/distribution business (and also why digital distribution of low budget games on PC makes it possible to avoid the traditional publishing model of funding up front).

Originally Posted by Gorath
The publishing deals are retail only. CDP does all digital alone.

Only for GOG, which was a fraction of TW2 digital sales compared to Steam.

At any rate, since CD Projekt derives a lot of revenue from other sources, like distribution of movies and third party games in Eastern Europe, maybe they are still doing just fine even if The Witcher 2 was not very profitable.